news-record.com

Golden Leaf audit

The N.C. Office of the State Auditor took a look at the Golden LEAF (Long-term Economic Advancement Foundation) nonprofit over the past year. Its report on the audit is at once harsh and kind of comforting.

Click here for a PDF of the audit report.

Golden LEAF handles about half the money North Carolina received as a result of the 1999 master settlement agreement with the tobacco industry. It was set up to foster economic development, particularly in rural communities, as jobs and profits from growing tobacco faded away.

Here’s what’s troubling: The report says Golden Leaf should do more to keep tabs on their grants. In particular, the auditor’s office says the foundation needs to do more to verify reports by their grantees and to vet the financial health of their grantees.

At the end of the day, the report offers a qualified opinion and the authors say they can’t say explicitly that no money has been wasted or lost.

Here’s what’s less than troubling: The report doesn’t site any instance where money had been wasted or lost.

“That’s fair,” said Dennis Patterson, a spokesman for the agency. “Had we found direct evidence, we would have pursued it.”

The qualified opinion is the result of auditors not feeling like they had unfettered access to Golden Leaf records. Pages 15 and 16 of the report detail the obstacles auditors complained they faced, including:

• Requests for minutes having to be repeated because “Golden LEAF management persistently omitted sets of minutes.
• Problems accessing a Golden LEAF file room.
• A request by management to route requests for information through the President or VP.

“A scope limitation finding is very important,” Patterson said. “It’s not very often we have that. Rarely do we get into a situation where we really can’t say one way or the other because of the restrictions that were put on us throughout the process.”

Dan Gerlach is the current president of Golden LEAF and has (obviously) a different take on things.

(Worth nothing given the recent spate of news over Gov. Mike Easley: Gerlach was a senior advisor to the former governor.)

Gerlach said that auditors arrived just as he was taking over at the foundation and during a busy time of year.

Some of the things cited as obstructionist by the auditors were meant to help speed the flow of information, Gerlach said.

“I didn’t know that telling them ‘Why don’t you go through me,’ was a problem,” Gerlach said. “They just felt like we weren’t cooperative. I’m sorry about that. I think it had to do with the timing of the transition…I think if the timing were different it would have been handled differently.”

Gerlach said the foundation owns up to and regrets errors made that lead to incomplete minutes and one grant approval being made in closed session. Those things will be fixed, he said.

As to the other findings, Gerlach points out that the audit didn’t find any missing or misspent money, qualified finding or no, after a year of going through the foundation’s books.

“We can tell you where every dollar has gone,” Gerlach said.

The foundation is in the process of changing its scholarship policies and may be putting some more requirements on grantees. However, Gerlach noted, most of Golden LEAF’s grantees were governments of one sort or another.

For example, the foundation contributed money toward the Dell deal that fell apart earlier this year. But that money didn't go to the company itself.

“Forsyth Tech went out and brought equipment for their computer lab,” Gerlach said. That equipment, which was used on job skills assessments, is still owned and used by the university.

Golden LEAF’s home page is here and you can search its grant awards here.

In Guilford County, Golden leaf money has been used for a variety of things, including:

• City of High Point's Economic Development Corporation: The purpose of this Golden LEAF grant is to support the design and implementation of a focused marketing campaign for the International Home Furnishings Market, which is held twice a year in High Point and generates significant economic opportunity for service, supply and retail businesses. Funds from this grant will be used for marketing and promotion activities aimed at increasing the number of buyers, vendors and visitors to the High Point Market and ensuring that the Market not only remains in North Carolina, but can grow and prosper. (Year=2004; Amount=$50,000)
• Guilford Technical Community College: The purpose of this Golden LEAF grant is to assist Guilford Technical Community College with retraining incumbent workers at Thomas Built Buses. The project will create 178 new jobs and retain 1,000 production jobs. (Year=2002; Amount=$500,000)
• North Carolina Agricultural and Technical State University: The purpose of this grant is to support the development of the North Carolina Center for Advanced Composites Training and Education at North Carolina A&T State University. The Center will provide the required education and training on the manufacturing and design practices used within composites applications industries. (Year=2007; Amount=$300,000)